Searching for rails executable correctly

* Current logic of finding Rails executable in parent directory is
   not returning full path of executable if it is found in one of the
   parent directories
 * To compensate for this, we have to call exec_app_rails recursively
   until the executable is found or we cant do 'chdir' anymore
 * This solution finds the correct executable path from parent
   directory(s) recursively

railties/lib/rails/app_rails_loader.rb

@@ -7,21 +7,21 @@ module Rails
 
     def self.exec_app_rails
       cwd = Dir.pwd
+      pathname = Pathname.new(Dir.pwd)
 
-      exe   = find_executable
-      exe ||= find_executable_in_parent_path
-      return unless exe
+      until exe = find_executable
+        # Return to working directory if root is hit without finding executable
+        Dir.chdir(cwd) and return if pathname.root?
+        # Otherwise keep moving upwards in search of executable
+        Dir.chdir("..")
+        pathname = pathname.parent
+      end
 
       contents = File.read(exe)
 
       # This is the Rails executable, let's use it
       if contents =~ /(APP|ENGINE)_PATH/
-        exec RUBY, exe, *ARGV if find_executable
-        Dir.chdir("..") do
-          # Recurse in a chdir block: if the search fails we want to be sure
-          # the application is generated in the original working directory.
-          exec_app_rails unless cwd == Dir.pwd
-        end
+        exec RUBY, exe, *ARGV
 
       # This is a Bundler binstub. Stop and explain how to upgrade.
       elsif exe =~ /bin\/rails$/ && contents =~ /This file was generated by Bundler/
@@ -59,10 +59,5 @@ generate it and add it to source control:
       EXECUTABLES.find { |exe| File.exists?(exe) }
     end
 
-    def self.find_executable_in_parent_path(path = Pathname.new(Dir.pwd).parent)
-      EXECUTABLES.find do |exe|
-        File.exists?(exe) || !path.root? && find_executable_in_parent_path(path.parent)
-      end
-    end
   end
 end

railties/test/app_rails_loader_test.rb

@@ -17,14 +17,14 @@ class AppRailsLoaderTest < ActiveSupport::TestCase
     test "is not in a rails application if #{exe} exists but doesn't contain APP_PATH" do
       File.stubs(:exists?).with(exe).returns(true)
       File.stubs(:read).with(exe).returns("railties #{exe}")
-      assert !Rails::AppRailsLoader.find_executable
+      assert !Rails::AppRailsLoader.exec_app_rails
     end
 
     test "is in a rails application if parent directory has #{exe} containing APP_PATH" do
       File.stubs(:exists?).with("/foo/bar/#{exe}").returns(false)
       File.stubs(:exists?).with("/foo/#{exe}").returns(true)
       File.stubs(:read).with("/foo/#{exe}").returns('APP_PATH')
-      assert Rails::AppRailsLoader.find_executable_in_parent_path(Pathname.new("/foo/bar"))
+      assert_equal Rails::AppRailsLoader.find_executable_in_parent_path(Pathname.new("/foo/bar")), "/foo/#{exe}"
     end
 
     test "is not in a rails application if at the root directory and doesn't have #{exe}" do
@@ -36,7 +36,7 @@ class AppRailsLoaderTest < ActiveSupport::TestCase
       File.stubs(:exists?).with("/foo/bar/#{exe}").returns(false)
       File.stubs(:exists?).with("/foo/#{exe}").returns(true)
       File.stubs(:read).with("/foo/#{exe}").returns('ENGINE_PATH')
-      assert Rails::AppRailsLoader.find_executable_in_parent_path(Pathname.new("/foo/bar"))
+      assert Rails::AppRailsLoader.find_executable_in_parent_path(Pathname.new("/foo/bar")), "/foo/#{exe}"
     end
 
     test "is in a rails engine if #{exe} exists containing ENGINE_PATH" do